Yeah, this tracks. My city has a few "retro" arcade bars with pinball, pacman, etc, and it's fun enough but you're for sure going for the nostalgia more than anything else.

I think part of the barrier to expanding the attached-to-other-things arcade concept is the whole aesthetic: an arcade is loud, with flashing lights, giant and sometimes lurid artwork on the machines. I think if you were able to make some machines that gave a high quality experience without all that side of it, you might be able to install them in other semi-public spaces: airports, train stations, shopping malls, basically anywhere you currently see things like massage chairs.

That said, maintenance is for sure a concern. The state of most public pianos does not inspire confidence.